Hot on the heels of Anatole Kaletsky debunking of the "chicken littles" who were pronouncing doom and gloom scenarios comparing the Credit Crunch to the Great Depression, Gerard Baker, also of The Times, adds his scorn and ridicule to the doom mongers saying that the Steinbeckian grapes of wrath have turned out to be raisins of mild inconveneience, not to say sour grapes on the part of the hyperactive scribbling masses who rejoiced in America's difficulty.

I'll let the astute readership here do their own parsing of his piece (reproduced below), but it seems to me that the MM (Murdoch Media or Murder Machine - take your pick) are mounting a sustained fightback to the Jeromes a Paris of this world who have dared question the health of the Capitalist system, Anglo American style (free market version)TM. It seems things are going just fine as far as our betters are concerned.

Whatever happened to the Great Depression? Not the real one from 70 years ago, the lost decade of unimagined misery and Steinbeckian angst, the worst period in the history of modern capitalism. I mean the replay we were promised this year. The one we were told was the inevitable counterpart to the greatest financial crisis since a couple of medieval Italians first sat down on a Florentine bench and invented the word "bank".

I don't know about you but I feel a bit cheated. There we all were, led to believe by so many commentators that the sub-prime crisis was going to force the United States into a new era of dust bowls and breadlines, a slump that would call into question the very functioning of the capitalist system in the world's largest economy. Carried away on the surging wave of their own economically dubious verbosity, the pundits even speculated that this unavoidable calamity might presage some 1930s-style global political cataclysm to match.

Well, it's early days, to be fair, but so far the Great Depression 2008 is shaping up to be a Great Disappointment. Not so much The Grapes of Wrath as Raisins of Mild Inconvenience. Last week the Commerce Department reported that the US economy - battered by the credit crunch, pummelled by a housing market collapse and generally devastated by the wild stampede of animal spirits - actually grew in the first three months of the year.

The rate of expansion - 0.6 per cent - was weak for sure, and it followed a previous quarter of identically weak growth at the end of 2007, but as Depressions go it was singularly unGreat. In the 1930s, you'll recall, GDP fell by more than 25 per cent. Even the periodic mild recessions we've had in the past 20 years at least resulted in some declines in economic activity.

Lest you object - perhaps fairly - that the GDP data are way too backward-looking to be of any use, last week we also got the news that the labour market, the canary in the coalmine of economic data, is actually improving. The US economy lost 20,000 jobs in April, while the unemployment rate ticked down a little to 5 per cent. You don't have to compare this performance to the Great Depression to think it looks, as downturns go, really quite uplifting. It is, in fact, the gentlest start to a period of labour market weakness since the 1960s.

For comparison, in the first four months of the 2001 recession (which was, by the way, the mildest one in postwar history) employment fell at an average monthly rate of 105,000. In the first four months of this current downturn, the average monthly job losses have been 62,000.

You won't need me to remind you that in the other Great Depression unemployment rose to an estimated 30 per cent. Worse still for today's Steinbeck wannabes, as my colleague Anatole Kaletsky noted yesterday, it is starting to look as though world financial markets might be past the worst of the crisis that started all this.

Financial conditions are cautiously returning to something approaching normal. Barometers of distress have shown a distinct turn for the better. Take, for example, the so-called TED spread, a pretty good proxy for the state of financial anxiety. It represents the difference between three-month Libor interest rates and the yield on three-month US Treasury bills. In other words, it measures how risky banks think lending to each other for relatively short periods is compared with the riskless alternative of lending to the Government.

Last Friday the spread fell to its lowest level since the end of February, shortly before the collapse of Bear Stearns. Now, at about 125 basis points, it is still elevated relative to periods of clear normality: the historic norm is between 25 and 50 points. But it's way down from where it was in March, December and August, when it exceeded 200 points.

So should we be putting out the bunting, declaring victory over the Depression, offering prayers of thanks that we have avoided another Munich or Dunkirk? Not quite. The depression scenario was always overdone, of course, but it is still not clear that the US will actually escape as lightly as this. The principal challenge remains the health of the American consumer.

House prices are still falling and there is plenty of evidence that many Americans, suddenly scared about the value of their house as a nest egg, are retrenching. Even with the Government's tax rebate cheques dropping on to doormats, caution seems to be the watchword. That also raises the troubling possibility that a period now of shrinking demand could feed back into renewed weakness in the financial system, just as it is starting to heal.

Still, the picture is starting to look quite encouraging. Even if the US has a recession this year, the chances that it will turn into a full-blown slump are not high. Another disappointment for the hyperactive scribbling masses. But rather welcome news for everybody else

Please note that in all these analyses society, or the economy, are always treated as an aggregate. There is no mention of power or wealth transfers within and between classes in society. What's good for GDP is good for us all. Any job is better than no job. The markets will provide. The consumer (even if it is conspicuous consumption by the rich) will come to the rescue of the economy. Be grateful to the rich when they spend their largesse and provide you with a job. Stop your begrudgery and envy. It's a beautiful world and its business as usual. Would the doom mongers please move on.....

Given that the Great Depression peaked three years after the Wall Street Crash in 1929, perhaps they are trying to ward off the inevitable - or at least make sure that the perception of Depression takes place under a Democratic rather than a Republican President. In our marketing wonderland it is the perception which is important - the reality a mere inconvenience which intrudes from time to time when the PR guys take their eye off the ball...

"It's a mystery to me - the game commences, For the usual fee - plus expenses, Confidential information - it's in my diary..."

There was an article in the last day or so (can't remember where) that showed that inflation in the US is running a low way above the official figure. Which would mean that a growth of 0.6 % would have been pushed into serious contraction if honestly calculated.

But I don't see how they can say this cos it's pretty obvious that bad things are still happening to the UK (and presumably the US) economy and will continue for some time to come. House prices are sinking, employment is sinking, consumer confidence is zero and circling the plughole. With the economy dependent on these things I cna't see anything happening soon and this stagnation means that jobs in service industries will be shed. City jobs are going at the rate of several thousand a month, that will have a staggering accumulated impact on London's economy.

So my view is that the people who didn't see this coming and don't understand why it happened are clutching at straws hoping it's over when they obviously cannot see the manhole cover they're just about to fall down.

As per Bill Maher, they have to stop making predictions

Maher: And finally, new rule in two parts: (A) You can't call yourself a think tank if all you're ideas are stupid; and

(B) If you're someone from one of these think tanks that dreamed up the Iraq War and who predicted that we'd be greeted as liberators, and that we wouldn't need a lot of troops, and that Iraqi oil would pay for the war, that the WMD's would be found, that the looting wasn't problematic, that the mission was accomplished, that the insurgency was in its last throes, that things would get better after the people voted, after the government was formed, after we got Saddam, after we got his kids, after we got Zarqawi, and that whole bloody mess wouldn't turn into a civil war, you have to stop making predictions.

I think we are seeing an increasing disconnect between an international/transnational/global elite tied to global capital - for whom a regional crisis, even in a region as the US isn't a problem - and everyone else who still clings to the national state centric paradigm where real problems are becoming increasingly obvious. As cheerleaders for the former, The Times, WSJ, NYT etc. really don't see the problem as more than a blip in their ever increasing wealth and power - which is tied to globalisation - not national political fortunes.

That is also why sites like ET - which take a global perspective, but from an ecological/humanistic rather than capitalistic perspective, are potentially such an important form of resistance and critique in the future. The nation state is almost broken as a means of controlling global capital - we need a global response -and for that we need to see through the faux nationalistic patriotism of the global elite - tools they use to kep peopl weak and divided.

"It's a mystery to me - the game commences, For the usual fee - plus expenses, Confidential information - it's in my diary..."

The nation state is almost broken as a means of controlling global capital - we need a global response -and for that we need to see through the faux nationalistic patriotism of the global elite - tools they use to kep peopl weak and divided.

The Internet is that global response IMHO, and the direct "Peer to Peer" connections it enables are already changing the system by cutting out the middlemen.

Napster was only the beginning. Banks, as credit intermediaries, are the walking dead. One of the outcomes of this process of disintermdiation, if I'm right, will be a change in the nature of capital itself.

"The future is already here -- it's just not very evenly distributed"
William Gibson